You’re rarely going to be the only affiliate that wants to buy traffic on a specific ad spot or search term. Due to this high demand, advertising networks like Google AdWords and FaceBook utilize a bidding system to determine who will receive the most traffic.

Bidding metrics vary in complexity from one traffic source to another, but they’re all based on the same core principle: the more you bid, the more traffic you get.

While this general idea should always apply, sometimes ad platforms reward people based on their budget, history with the source, and consistency of their spend. For example, AdWords would give preference to a large corporation spending $10k/day everyday over the affiliate that wants to spend $11k/day once a month.

Furthermore, your bid on an ad placement also determines the ad rotation of that spot. This is a key concept to understand, because it explains why sometimes bidding higher will actually garner a higher conversion rate and be more profitable than a lower bid.

Below is the bid table for a premium spot on the most popular adult site in the world.

This screenshot just shows the top ~10 bids for this ad, there are hundreds more below them that are receiving negligible amounts of traffic.

As we can see, the top two affiliates buying traffic on this spot are receiving almost 1/3 of all of its traffic. What isn’t shown in this table is the ad rotation, and that the high bidders are getting their banners seen before the rest.

Banner blindness kicks in after a few refreshes of a page, and having your ad be the first shown to a visitor will dramatically increase your CTR.

This is why higher bids can often yield higher ROIs, despite the cost increase. Your CPM can be 5-10% higher, but if your CTR jumps 20%, then you’re in the clear.

Of course, split-test with all kinds of bids to find out what is working best and throwing the highest EPC.

Be very careful when you’re testing. I don’t even know how many times I’ve set a sky-high bid and forgot to lower the budget, blowing hundreds of dollars on a fruitless test.

TL;DR – You’re not the only person that wants traffic from huge sites like Google and Facebook. In order to keep things fair, these sites allow you to compete against other people. Higher bids usually get more traffic and convert better. Test your bids as you would test banners, ad text etc. and see what works for you.

Something like September, 2011. Spending Sunday night over at a family friend’s house, we decided to pop in a movie. The Social Network came up on OnDemand, and it piqued everyone’s interest. In short, this film literally had my jaw on the floor, speechless and completely enamored with how a website could not only generate so much money, but change society forever.

Some background. I was pretty into technology as a kid. I wouldn’t have classified myself as a full on nerd, I just liked computers and was interested in the latest, greatest processors, graphics cards and other miscellaneous tech products. Played way too much Call of Duty in middle school. Other than that, I was a pretty normal, active kid who played baseball, loved hanging out with friends and going to school everyday.

Most people won’t buy something if it’s simply thrown in front of them, they need to be “warmed up” to the product and persuaded to purchase it.

If you go to a Porsche dealership, the salesman isn’t going to point you to a 911 and leave, he’s going to try to sell you on the car by telling you why it’s awesome and how it would fit oh so perfectly in your garage.

Quick note: traffic = people/visitors/users that are sent to a website

Throughout the online marketing industry, especially in affiliate marketing, advertisers and affiliates alike put a massive emphasis on sending quality traffic to their products. So, what makes some traffic “good” and other traffic “bad”?

There are a myriad of factors that go into determining the quality of traffic, but the answer to one simple question will sum it up: does this traffic benefit everyone involved?

As we all know, people get into affiliate marketing to make money. Advertisers don’t run charities, they’re not just doling out money to any affiliate who can fire their conversion pixel, they need a return on their investment.

We’ve established that affiliate marketing is where someone sells a product or service for someone else in exchange for a commission.

An affiliate network is essentially a business that has a tracking system that houses thousands of offers from a variety of advertisers, and provides affiliates access to their platform so they can promote their offers. Think of a network as a broker between the affiliate and advertiser.

A relationship with only two parties involved, an advertiser and a publisher, is known as a direct relationship. While this may seem like an optimal situation, affiliate networks can often provide value to affiliates that improves their bottom line, making working with a network more profitable than going direct with an advertiser.

CPA is simply a type of affiliate marketing. You’ll hear a lot of these kind of acronyms, and they’re all just references to what constitutes a “conversion” for the affiliate. Cost Per Trial, Cost Per Sale, Cost Per Lead, and more all fall under the umbrella of Cost Per Action, since they require the user to do something before a conversion takes place.

In this post, I’m going to be breaking down the most common forms of Cost Per Action marketing, focusing on the four I mentioned above. I will barely be able to scratch the surface of the topic, but this should serve you for some general knowledge of the topics. Within each of these categories, there are numerous verticals, or types of products to promote (i.e. a dating website for CPL, where the affiliate gets paid when the user registers to the site), and I will go in-depth on each in a future post.

Cost Per Lead

CPL offers all have one thing in common: somewhere down the sales funnel, there is going to be an up-sell. Let me give you two different examples.